The Government is supporting sovereign semiconductor research and fabrication through a range of targeted investments as part of the UK’s Modern Industrial Strategy. This includes over £1.1 billion through the UK AI Hardware Plan and £718 million for semiconductor, advanced connectivity technologies and cyber research via UKRI up to 2030. The Government has also supported domestic fabrication capability, including a £60 million National Wealth Fund investment in Pragmatic Semiconductor, support through the Automotive Transformation Fund for Vishay’s £250 million investment in Newport, and the Ministry of Defence’s acquisition of the facility now operating as Octric Semiconductor. These investments strengthen UK sovereign research, commercialisation, resilience and manufacturing capability.

The Government is supporting the growth of the UK semiconductor sector, including the development of hardware-based cyber security technologies, through support across innovation, skills, procurement and investment. The £1.1 billion AI Hardware Plan includes an £18 million Hardware Security R&D Programme to strengthen the secure deployment and scaling of AI hardware. The Government is also supporting UK strengths in secure-by-design technologies, including the commercialisation of CHERI. Alongside this, the Government is investing £80 million in semiconductor and AI hardware skills, expanding training and career pathways to help build the pipeline of engineers and researchers needed for companies to develop these technologies.

The Defence Industrial Strategy set out our approach to investing in and onshoring the necessary industrial capabilities for sovereign national security and to boost UK economic growth. It recognises semiconductors as a priority sub-sector critical to modern military platforms and UK defence manufacturing. The Ministry of Defence is therefore focused on ensuring secure, resilient access to these technologies to support national security.

For sensitive and classified applications, Defence requires an assured and trusted supply, including specialised compound semiconductors, where UK-based capability can be essential. An example of this Government’s commitment to action can be seen in its acquisition of Octric Semiconductors in September 2024.

Since establishing a dedicated semiconductor Category Management workstream, the Department has expanded engagement across Defence, wider Government and industry to improve understanding of semiconductor dependencies, supply chain risks and future capability requirements. This activity is informing development of a Defence semiconductor category strategy and supporting wider supply chain resilience initiatives.

The Government recognises that semiconductor supply chains are highly complex and remain vulnerable to risks arising from the concentration of production capacity in a limited number of overseas markets, including China. The Government draws on a range of evidence and industry engagement to assess the UK’s exposure to geographic concentrations across these supply chains

To strengthen resilience, the Government works closely with international partners, bilaterally and through the G7 and OECD, to support more diversified and resilient supply chains. Alongside this, the Government is supporting UK semiconductor capability through the Modern Industrial Strategy and AI Hardware Plan, building on UK strengths in strategically important technologies and helping UK firms develop and scale.

In June, the government published the AI Hardware Plan, which aims to secure Britain’s future capability and strategic advantage in the chips and semiconductor technologies that underpin AI, and to anchor a growing share of high-value AI hardware activity and industrial capability in the UK.

The plan is about supporting the sector for the long-term, building sovereign capability and anchoring growth in the UK in the years to come. Sovereign capability is about ensuring the UK can contribute meaningfully within global supply chains, working with international partners rather than trying to do everything domestically.

The Sovereign AI Fund invests alongside the private sector in areas of existing UK strength, where government action can materially improve scaling outcomes, and there is a credible path to success. These include compute and infrastructure, which span emerging semiconductor and AI hardware technologies.

The Fund’s integrated offer – combining equity investment, compute, R&D funding, procurement and talent support – will help crowd in follow-on finance, government demand and wider ecosystem engagement for supported companies.

More broadly, concentrating public funding into this sector through wider initiatives such as the Government's £1.1 billion AI Hardware Plan is expected to boost private investment into companies across the UK semiconductor sector.

The UK is well positioned to take advantage of the increased demand for AI hardware created by the growth in the AI industry. The AI Hardware Plan is capitalising on this opportunity, and by increasing access to capital, public procurement opportunities, and targeted support, we are strengthening the incentives for companies to anchor and scale in the UK, and improving routes from innovation to deployment, including through procurement and investment.

This will support the creation of a critical mass of talent and investment, secure Britain’s future capability and strategic advantage in the chips and semiconductor technologies that underpin AI and anchor a growing share of high-value AI hardware activity and industrial capability across the UK. The Plan also supports opportunities for global collaboration, with the UK an open, attractive partner in global supply chains, and will ensure that both UK and international firms can develop and scale in the UK.

A recent study estimated that in a high growth scenario, jobs supported by the UK semiconductor sector could reach as high as 40,000 by 2030, up from 26,000 in 2025; the AI Hardware Plan is providing the conditions for this stronger sector growth. To support the development of this critical mass of talent, the Plan announced an increase to £80m of investment in semiconductor and AI hardware skills, which will support the training of thousands of new people.

In regards to specific elements such as the new national AI supercomputer, estimates are ongoing and dependent on a number of factors such as the energy efficiency of novel AI inference chips, which promise to significantly reduce the energy consumption of the hardware used.

The UK is well positioned to take advantage of the increased demand for AI hardware created by the growth in the AI industry. The AI Hardware Plan is capitalising on this opportunity, and by increasing access to capital, public procurement opportunities, and targeted support, we are strengthening the incentives for companies to anchor and scale in the UK, and improving routes from innovation to deployment, including through procurement and investment.

This will support the creation of a critical mass of talent and investment, secure Britain’s future capability and strategic advantage in the chips and semiconductor technologies that underpin AI and anchor a growing share of high-value AI hardware activity and industrial capability across the UK. The Plan also supports opportunities for global collaboration, with the UK an open, attractive partner in global supply chains, and will ensure that both UK and international firms can develop and scale in the UK.

A recent study estimated that in a high growth scenario, jobs supported by the UK semiconductor sector could reach as high as 40,000 by 2030, up from 26,000 in 2025; the AI Hardware Plan is providing the conditions for this stronger sector growth. To support the development of this critical mass of talent, the Plan announced an increase to £80m of investment in semiconductor and AI hardware skills, which will support the training of thousands of new people.

In regards to specific elements such as the new national AI supercomputer, estimates are ongoing and dependent on a number of factors such as the energy efficiency of novel AI inference chips, which promise to significantly reduce the energy consumption of the hardware used.

The UK is well positioned to take advantage of the increased demand for AI hardware created by the growth in the AI industry. The AI Hardware Plan is capitalising on this opportunity, and by increasing access to capital, public procurement opportunities, and targeted support, we are strengthening the incentives for companies to anchor and scale in the UK, and improving routes from innovation to deployment, including through procurement and investment.

This will support the creation of a critical mass of talent and investment, secure Britain’s future capability and strategic advantage in the chips and semiconductor technologies that underpin AI and anchor a growing share of high-value AI hardware activity and industrial capability across the UK. The Plan also supports opportunities for global collaboration, with the UK an open, attractive partner in global supply chains, and will ensure that both UK and international firms can develop and scale in the UK.

A recent study estimated that in a high growth scenario, jobs supported by the UK semiconductor sector could reach as high as 40,000 by 2030, up from 26,000 in 2025; the AI Hardware Plan is providing the conditions for this stronger sector growth. To support the development of this critical mass of talent, the Plan announced an increase to £80m of investment in semiconductor and AI hardware skills, which will support the training of thousands of new people.

In regards to specific elements such as the new national AI supercomputer, estimates are ongoing and dependent on a number of factors such as the energy efficiency of novel AI inference chips, which promise to significantly reduce the energy consumption of the hardware used.

The UK is well positioned to take advantage of the increased demand for AI hardware created by the growth in the AI industry. The AI Hardware Plan is capitalising on this opportunity, and by increasing access to capital, public procurement opportunities, and targeted support, we are strengthening the incentives for companies to anchor and scale in the UK, and improving routes from innovation to deployment, including through procurement and investment.

This will support the creation of a critical mass of talent and investment, secure Britain’s future capability and strategic advantage in the chips and semiconductor technologies that underpin AI and anchor a growing share of high-value AI hardware activity and industrial capability across the UK. The Plan also supports opportunities for global collaboration, with the UK an open, attractive partner in global supply chains, and will ensure that both UK and international firms can develop and scale in the UK.

A recent study estimated that in a high growth scenario, jobs supported by the UK semiconductor sector could reach as high as 40,000 by 2030, up from 26,000 in 2025; the AI Hardware Plan is providing the conditions for this stronger sector growth. To support the development of this critical mass of talent, the Plan announced an increase to £80m of investment in semiconductor and AI hardware skills, which will support the training of thousands of new people.

In regards to specific elements such as the new national AI supercomputer, estimates are ongoing and dependent on a number of factors such as the energy efficiency of novel AI inference chips, which promise to significantly reduce the energy consumption of the hardware used.

The UK is well positioned to take advantage of the increased demand for AI hardware created by the growth in the AI industry. The AI Hardware Plan is capitalising on this opportunity, and by increasing access to capital, public procurement opportunities, and targeted support, we are strengthening the incentives for companies to anchor and scale in the UK, and improving routes from innovation to deployment, including through procurement and investment.

This will support the creation of a critical mass of talent and investment, secure Britain’s future capability and strategic advantage in the chips and semiconductor technologies that underpin AI and anchor a growing share of high-value AI hardware activity and industrial capability across the UK. The Plan also supports opportunities for global collaboration, with the UK an open, attractive partner in global supply chains, and will ensure that both UK and international firms can develop and scale in the UK.

A recent study estimated that in a high growth scenario, jobs supported by the UK semiconductor sector could reach as high as 40,000 by 2030, up from 26,000 in 2025; the AI Hardware Plan is providing the conditions for this stronger sector growth. To support the development of this critical mass of talent, the Plan announced an increase to £80m of investment in semiconductor and AI hardware skills, which will support the training of thousands of new people.

In regards to specific elements such as the new national AI supercomputer, estimates are ongoing and dependent on a number of factors such as the energy efficiency of novel AI inference chips, which promise to significantly reduce the energy consumption of the hardware used.

Government support for the semiconductor industry is set out in the recently published £1.1 billion AI Hardware Plan, as well as the Industrial Strategy and Digital and Technologies Sector Plan. The AI Hardware Plan includes measures such as a £400m procurement opportunity for innovative next-generation chips for the AI Research Resource, the launch of a new venture fund with an up to £150m cornerstone investment from the British Business Bank, a £120m investment in AI hardware innovation, and an increased investment in skills to over £80m of targeted interventions to help bolster access to talent and train the future workforce.

This builds on the Industrial Strategy’s Digital and Technologies Sector Plan, which outlined further support for the semiconductor sector including £19 million for a new UK Semiconductor Centre to coordinate the sector and act as a “front door” for international cooperation and £25 million for additional “Innovation and Knowledge Centres” that enable researchers to work with industry to commercialise research in emerging semiconductor technologies.

The Government works closely across departments to strengthen the resilience of critical supply chains, including those underpinning the UK's semiconductor industry. The Department for Science, Innovation and Technology works in coordination with the Department for Business and Trade, His Majesty’s Treasury and other departments to monitor risks, identify vulnerabilities and improve resilience.

The Government’s Industrial Strategy supports growth in the UK semiconductor sector and includes measures to strengthen supply chain resilience. Given the global nature of semiconductor supply chains, the Government also works with international partners, including through the G7 and the OECD, to address shared risks and strengthen collective resilience to global economic shocks and potential disruption, including from geopolitical conflicts.

The Defence Industrial Strategy sets out our approach to investing in and onshoring the necessary industrial capabilities for sovereign national security and to boost UK economic growth. It recognises semiconductors as a priority sub-sector critical to modern military platforms and UK defence manufacturing. The Ministry of Defence is therefore focused on ensuring secure, resilient access to these technologies to support national security.

For sensitive and classified applications, Defence requires an assured and trusted supply, including specialised compound semiconductors, where UK-based capability can be essential. An example of this Government’s commitment to action can be seen in its acquisition of Octric Semiconductors in September 2024.

The Department is also strengthening its expertise through a dedicated Category Management approach to semiconductors, improving demand signalling, market intelligence and risk management. This work is supported by close engagement with the Department for Science Innovation and Technology, the Department for Business and Trade, the Semiconductor Advisory Panel, industry and international partners, alongside ongoing analytical work, development of a Defence semiconductor strategy, and targeted investment in skills and capability.

The Defence Industrial Strategy sets out our approach to investing in and onshoring the necessary industrial capabilities for sovereign national security and to boost UK economic growth. It recognises semiconductors as a priority sub-sector critical to modern military platforms and UK defence manufacturing. The Ministry of Defence is therefore focused on ensuring secure, resilient access to these technologies to support national security.

For sensitive and classified applications, Defence requires an assured and trusted supply, including specialised compound semiconductors, where UK-based capability can be essential. An example of this Government’s commitment to action can be seen in its acquisition of Octric Semiconductors in September 2024.

The Department is also strengthening its expertise through a dedicated Category Management approach to semiconductors, improving demand signalling, market intelligence and risk management. This work is supported by close engagement with the Department for Science Innovation and Technology, the Department for Business and Trade, the Semiconductor Advisory Panel, industry and international partners, alongside ongoing analytical work, development of a Defence semiconductor strategy, and targeted investment in skills and capability.

From 2027, the new British Industrial Competitiveness Scheme (BICS) will cut energy bills by up to 25% for eligible, energy-intensive manufacturers in the priority industries in the Industrial Strategy -including semiconductors. This will give businesses certainty and stability, and back Britain’s fastest growing sectors with the support they need to prosper.